Agere joins with Infineon to make Wi-Fi chips

The tiny devices link computers in offices or at home without wires.

Agere Systems of Allentown and Infineon Technologies will join forces to develop wireless networking chips 20 times more powerful than today's standard, the companies announced Tuesday.

The new technology could help eliminate the need to snake cables through office buildings and allow users to beam movies from a desktop computer to television screens throughout the home.

It could also dramatically boost the speed at which laptop computers, cell phones and other mobile devices reach the Internet.

"One of the key benefits of this technology is mobility, and any type of product that allows mobility is a target for this application," said David Favreau, Agere's wireless products director.

The companies did not say how much revenue they expect the joint development agreement to generate, but wireless networking is one of the few high-growth areas that remain in the depressed technology sector.

The market for wireless networking chips is expected to grow at a compound annual rate of nearly 30 percent, from $331 million in 2001 to $1.2 billion by 2006, according to research firm IDC.

Agere's collaboration with Infineon, of Munich, Germany, will focus on developing products based on the popular 802.11 technology standard, more commonly known as Wi-Fi.

Unlike wireless phone networks, which transmit and receive signals over distances of many miles, Wi-Fi networks are used primarily within a single building or corporate campus. They have a transmission range of more than 1,700 feet outdoors and up to 500 feet indoors, although data speeds tend to slow as users get farther away from the base station.

Companies that place base stations at various locations in an office and outfit laptop computers with wireless networking cards allow employees to roam from their desk to the conference room without disconnecting from the corporate network.

Wi-Fi networks are also common in places such as airports and hotel lobbies, where business travelers can use laptops or personal digital assistants to check e-mail and perform other tasks.

By combining Agere's chip design expertise with Infineon's skills in radio transmission, the two companies hope to offer Wi-Fi components that are better and cheaper than current offerings, which range from about $80 for a laptop wireless networking card to about $400 for a business-class base station.

Tony Grewe, Agere's marketing director for client systems, said the companies have started design work on the new chips and hope to have customer samples available during the second quarter of 2003.

"Providing improved performance, while reducing system costs, will be a key factor in accelerating market deployment of high-speed wireless networking," said Ron Black, executive vice president of Agere's client systems group.

Current Wi-Fi standards allow users to transmit and receive data at a rate of 11 megabits per second. That's five to 10 times faster than cable modems and slightly faster than the standard office network, which runs at 10 megabits per second.

Agere and Infineon officials said they will develop improved Wi-Fi chips that will allow data transfer speeds up to 54 megabits per second. The new chips will not only be many times faster than existing products, but also handle a greater volume of information, Favreau said.

That will allow wireless networks to accommodate more users and process large files without slowing the entire network.

"This starts to become a realistic backbone technology for business to use in place of their wired ethernet connections," Favreau said.

The new technology also opens numerous possibilities for in-home multimedia applications.

For example, Agere officials said, Wi-Fi equipment incorporated into a satellite television receiver could beam the signal to several other TV sets around the house -- eliminating the need for additional wiring and multiple set-top boxes.

Another major feature Agere and Infineon hope to include in their new Wi-Fi products is backward compatibility, which means that the new chips will also work with older networks based on the current 11 megabits per second standard.

That would eliminate many of the hassles commonly associated with trying to operate computing devices on multiple technology platforms, such as the need to buy new equipment or change system settings.

"Our vision is to have a universal product that can automatically detect what type of network connection is available and then allow the user to operate at the highest data rate possible," Favreau said.

Agere's agreement with Infineon will allow the company to conduct joint research and develop new Wi-Fi chips and related software.

Agere and Infineon will also cross-license patents and support each other's manufacturing efforts.

Agere Systems is the world's No. 1 maker of communications chips used in products such as cell phones, hard disk drives and wireless computer networks. Infineon makes chips and other products used in radios, automobiles, security systems and data storage devices.